Ethan Allen sued for $500M

News-Times, The (Danbury, CT)

Published 7:00 pm, Monday, February 11, 2008

Lawyers for Nicholas Mariano Jr., owner of three Treasure Coast Interiors Inc. stores, in Stuart, Vero and Melbourne, Fla., cited breach of contract and other items in the suit filed in September in the 19th Judicial Circuit Court in Martin County, Fla.

"They're literally, as we speak, going out of business," attorney C.K. Hoffler, a partner in Gary, Williams, Finney, Lewis, Watson

& Sperando, said Monday when asked why Treasure Coast Interiors waited until February to announce the suit.

Hoffler said Ethan Allen abruptly terminated its 13-year association with Mariano in August 2007. The stores are now liquidating their remaining stock.

Ethan Allen "aggressively pursued" Nicholas Mariano Jr. to take over an ailing company store, Hoffler said, and to open new sites. "They did not build the business in these markets. Our client did."

The $500 million figure includes punitive damages, she added.

In an e-mailed statement Monday, Ethan Allen spokeswoman Peg Lupton said the company doesn't comment on pending litigation, except to say it is "confident that this case is without merit."

Generally, the statement said, the company has set standards of operation. "It is only after providing a retailer the opportunity to meet these standards "� that the company takes such action to protect the brand and its customers."

Hoffler said, "We think that was really bogus." She believes the company is getting rid of the individual retailers who act as middlemen.

No court date has yet been set.

In January, Ethan Allen announced plans to close some of its retail design centers. At the end of 2007, it had 160 company-owned and 145 independently owned design centers.

About two weeks after the closing announcement, Ethan Allen reported net income of $20.6 million, or 70 cents per diluted share, for the quarter ended Dec. 31, 2007. In the year-ago quarter, it earned $22.8 million, or 70 cents per share.

Shares of Ethan Allen closed up 70 cents to $29.11 in trading Monday on the New York Stock Exchange.